New racino could threaten Vernon Downs

VERNON -- Jeff Gural is confident about two things: the state won't approve a racing license for a harness racetrack so close to Vernon Downs and if it does, it will undoubtedly be the end of his business.

As Syracuse Raceway, a group headed by Rochester real estate developer Thomas Wilmot Sr., vies for the last remaining horse racing license in the state, Vernon Downs officials and local politicians are pleading with the state to deny the deal.

Syracuse Raceway received approval of its incorporation papers from the New York State Racing and Wagering Board in December. The group has not yet submitted a licensing application for the horse track and would need approval from the New York State Lottery to simultaneously open a video lottery terminal facility.

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While a specific site has not been identified yet, Wilmot has talked about establishing the $100 million track and racino at the New York State Fairgrounds, or within close proximity.

The Onondaga County Legislature would be required to create a local law authorizing the VLT facility. To sweeten that deal, Wilmot has offered to potentially build a much-desired hotel near the Oncenter in the City of Syracuse with the earnings from the racetrack and racino.

Oneida Nation Spokesman Mark Emery said the Nation would oppose the racino at the Fairgrounds if the purpose was to fund a hotel project.

"Any attempt by Mr. Wilmot to install video lottery terminals at the Fairgrounds would be illegal," he said. "The New York state statute authorizing gaming operations at race tracks expressly prohibits those machines at the New York State Fairgrounds for any purpose."

Racing and Wagering Board Public Information Officer Joe Mahoney said the project is still in the early stages. He said the next step would be for Syracuse Raceway to file an application for licensing.

The three-member board will consider a multitude of elements while reviewing the application, he said, including organizational charts on ownership, agreements with horsemen, financial projections, facility plans and financial background.

When asked if the board would weigh the potential impacts on neighboring gambling facilities, he said, "It would be up to the board to determine what factors would be taken into account."

Mahoney called licensing approval an "open process."

"Anyone who wants to submit an opinion would be entitled to," he said. "We're very transparent. We pride ourselves on being very transparent."

Gural, the chairman of American Racing and Entertainment which owns Vernon Downs and Tioga Downs, said his attorney, Marvin Newberg, has drafted a letter to the Racing and Wagering Board reminding them of the licensing provisions that specifically require it to consider impacts on existing racetracks.

The issuance of a license must be in the best interests of the racing industry in general and more specifically cannot be approved for a harness racetrack located within 25 miles from an already-existing facility with the same race dates and hours.

While Vernon Downs is about 40 miles from Syracuse, a racetrack in Onondaga County "would have a substantial prejudicial effect upon the operation and viability of Vernon Downs Racetrack and Casino," the letter says.

Newberg continues by pointing to studies that have indicated that racinos are not destination facilities but instead draw patrols within 30-40 miles of the facility. According to Gural, 25 percent of Vernon Downs' patronage comes from the Syracuse area.

Gural also questioned if a sufficient number of horses and horsemen exist to supply both tracks.

If Wilmot moves forward with his plans to build the track and racino in Syracuse, and the state grants the license, Gural was confident that Vernon Downs would be forced to close.

"I find it hard to believe that the state would allow the project to go forward," he said.

While it would put 300 people out of work, he said the state would also lost about $20 million it receives a year from the facility, a move that seems counterintuitive.

"Why would they approve a project that would have such a harmful effect on an existing racino?" he asked. "In all honesty, I'm not that concerned about it. I just can't believe that the state could do something so stupid. I have enough confidence in our government though. If I were overly concerned I certainly wouldn't be expanding Vernon Downs. I just don't think that it's possible that the state would allow another facility to open that would force an existing facility to close. I think everybody recognizes that having two of these 30 miles apart and Turning Stone in the middle, there's not enough customers for that type of situation."

Originally, Wilmot was considering partnering with Gural. The Syracuse racetrack would have run on Vernon Down's license and shared the profit.

"If we had done it together and came up with a formula where Vernon was protected so whatever loses Vernon had would be offset by the profits from Syracuse, then that might've made sense," Gural said. "But to do it the way he's doing it would simply put us out of business. There's no question about it."

Since its drastic turn around from its previous financial plight, Gural said they've managed to reduce their loses considerably but is still not profitable. He pointed to Turning Stone as the "only reason" why Vernon Downs hasn't been more successful.

"It's hard to compete with Turning Stone," he said, a facility that does not pay taxes, he added. "If there was no Turning Stone, Vernon would be a big success."

Oneida County Legislator Michael Hennessy has taken a direct role in advocating against the Syracuse racetrack.

"I wouldn't want that to be the final nail in the coffin for Vernon Downs," he said of the proposed project.

He said the racetrack raises concerns about jobs and profitability. Having sent letters to the Racing and Wagering Board and New York State Lottery, Hennessy plans on setting up a meeting with both entities to stress the impact the new facility would have on Vernon Downs.

"To provide a new competitor is not sensitive to the area's needs," Hennessy said. "We have a major loss of jobs in the area, strong needs to bring new jobs in the area and protect the jobs that already exist."

Hennessy said Oneida County needs to be protective of the financial commitment Gural has made to the area.

"We, in Oneida County, have spent a lot of time and a lot of effort to get Vernon Downs turned around," Hennessy said. "It's starting to do that."